§1735c General Insurance Fund

Summary

Creates a General Insurance Fund that the Secretary must use starting August 10, 1965 as a revolving fund to insure most mortgages and loans under this chapter. Mortgages or loans insured under commitments made on or after August 10, 1965, and loans reported under section 1703 on or after that date must be covered by this Fund. The Secretary must move into the Fund the assets and debts of earlier insurance accounts (except the Mutual Mortgage Insurance Fund), outstanding insurance commitments and existing insured loans and mortgages made before August 10, 1965 (except those the law excludes), and loans insured under section 1703 before that date. The Fund can pay HUD’s general costs tied to these mortgages and loans. Money not needed right away must be held by the U.S. Treasurer or invested in U.S. government obligations, and when possible those investments should directly support the residential mortgage market. With Treasury approval, the Secretary may buy Fund debentures on the open market (not Mutual Mortgage Insurance Fund debentures); bought debentures must earn at least as much as other allowed investments and must be canceled. Premiums, adjusted premiums, fees, property receipts, claim recoveries, and earnings go into the Fund. Debenture principal and interest, insurance payments and adjustments, and costs to manage or sell properties are paid from the Fund. The Fund does not cover certain special programs under section 1709 (unless the Secretary decides otherwise), parts of section 1715e tied to the Cooperative Management Housing Insurance Fund, and sections 1715n(e), 1715x(a)(2), 1715z, 1715z–1, and 1715z–2. The Secretary must do a yearly risk review of the Fund’s insurance programs and report the findings to Congress in the FHA Annual Management Report.